a

GAO

United States General Accounting Office

Testimony

Before the Subcommittee on Civil Service and Agency 

Organization, Committee on Government Reform, House 

of Representatives

For Release on Delivery

Expected at 2:00 p.m. EDT

Tuesday, May 18, 2004

HUMAN CAPITAL

Observations on Agencies’ 

Implementation of the 

Chief Human Capital 

Officers Act

Statement of J. Christopher Mihm

Managing Director, Strategic Issues

GAO-04-800T
www.gao.gov/cgi-bin/getrpt?GAO-04-800T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact J. Christopher 

Mihm at (202) 512-6806 or mihmj@gao.gov. 

Highlights of GAO-04-800T, a testimony 

before the Subcommittee on Civil Service 

and Agency Organization, Committee on 

Government Reform, House of 

Representatives 

May 18, 2004

HUMAN CAPITAL

Observations on Agencies' 

Implementation of the Chief Human 

Capital Officers Act 

The inaugural CHCOs appointed since May 2003 varied in the positions they 

were holding prior to their selection by the agency head, the responsibilities 

assigned to them when they became CHCOs, whether they were political 

appointees or career executives and whether they reported directly to the 

agency head. 

According to the CHCOs, their efforts are primarily focused on the human 

capital efforts needed to address the President’s Management Agenda 

(PMA). In our discussions with the CHCOs, they cited strategic human 

capital management and, to a lesser extent, competitive sourcing as the two 

primary PMA initiatives on which they are focusing. 

The CHCO Council’s activities during its first year have largely revolved 

around start-up activities including organizing the council and establishing 

subcommittees. For example, the Council created subcommittees to 

address and recommend change for five key areas--the hiring process, 

performance management, leadership development and succession planning, 

employee conduct and poor performers, and emergency preparedness. 

At the request of this subcommittee and others in Congress, we have 

undertaken a large body of work in recent years that should prove helpful to 

the Council and its subcommittees as they develop their initiatives in the five 

areas. For example, as we reported in May 2003, there is widespread 

recognition that the current federal hiring process does not meet the needs 

of agencies in achieving their missions, managers in filling positions with the 

right talent, and applicants for a timely, efficient, transparent, and meritbased process. We made a number of recommendations to the Office of 

Personnel Management (OPM) to address various parts of the hiring process.

In addition, in March 2004, GAO issued a guide for assessing strategic 

training and development efforts in the federal government. 

In addition to the important areas already receiving priority attention by the 

Council, our work suggests that the Council should ensure that as it moves 

forward, its efforts address agencies’ need for guidance, assistance, 

knowledge, and leading practices in several other key crosscutting areas 

such as: 

• developing the capabilities required for successful implementation of

human capital reform, 

• strategic human capital planning, and 

• transforming the human capital office and its processes to more fully 

contribute to key agency decisions. 

We believe that our work should prove helpful to the Council as they address

these and other areas. 

Congress recognized the critical 

leadership role the agency Chief 

Human Capital Officers (CHCOs) 

and the CHCO Council must play in 

the fundamental changes that need 

to take place across the executive 

branch. A range of 21st century 

challenges are driving the need for 

a fundamental transformation of 

the federal government. People 

strategy must be a key element of 

this overall transformation effort. 

People define an organization’s 

culture, drive its performance, and 

embody its knowledge base. 

Congress has provided agencies 

across the executive branch with 

additional tools and authorities 

needed to strategically manage 

their workforces. The success of 

these and related initiatives will 

depend in large measure on the 

existence of high-quality CHCOs 

and a strategic and effective CHCO 

Council. 

At the request of the subcommittee, 

GAO discussed (1) the different 

approaches agencies used in 

selecting CHCOs and creating the 

CHCO position, (2) the key 

responsibilities of the CHCOs, and 

(3) the initial steps taken by the 

CHCO Council and some suggested 

next steps. 
Page 1 GAO-04-800T 

Chairwoman Davis, Mr. Davis, and Members of the Subcommittee:

I am pleased to be here today to discuss the actions taken to implement the 

Chief Human Capital Officers (CHCO) Act of 2002 and our preliminary 

observations on the role of both the agency CHCOs and the CHCO Council, 

as we approach the completion of the first year in which these senior 

agency leadership positions and this council were created. As you know, 

Congress created the CHCO position in 24 agencies to advise and assist the 

head of the agency and other agency officials in their strategic human 

capital management efforts; the CHCO Council was created to advise and 

coordinate the activities among the agencies.

Congress recognized the critical leadership role the agency CHCOs and the 

CHCO Council must play in the fundamental changes that need to take 

place across the executive branch. The nation’s large and growing longterm fiscal imbalance and a range of other 21st century challenges are 

driving a fundamental transformation of the federal government. This 

transformation requires a comprehensive reexamination of what the 

government does, how it does business, and in some cases, who does its 

business. Ultimately, to successfully transform, the federal government 

must change its culture to become more results-oriented, customerfocused, and collaborative in nature. 

People strategy must be a key element of this overall transformation effort. 

People define an organization’s culture, drive its performance, and embody 

its knowledge base. Over the past couple of years, Congress has sought to 

modernize federal human capital policies by allowing certain agencies, 

most notably the Departments of Defense and Homeland Security, to adopt 

more flexible approaches to their human capital management. At the same 

time, Congress has provided agencies across the executive branch with 

additional tools and authorities needed to strategically manage their 

workforces. The success of these and related initiatives will depend in 

large measure on the existence of high-quality CHCOs and a strategic and 

effective CHCO Council. 

My statement today will describe first, the different approaches agencies 

used in selecting CHCOs and creating the CHCO position, second, the key 

responsibilities of the CHCO’s, and third, the initial steps taken by the 

CHCO Council and some suggested next steps. 

My comments today are based on our interviews with each of the agency 

CHCOs and the Executive Director of the CHCO Council; available 
Page 2 GAO-04-800T 

documents on the start-up efforts of the CHCO Council such as the agenda 

and plans for its initial meetings; our experiences in evaluating the 

implementation of other major management reforms, such as the Chief 

Financial Officers (CFO) Act, the Government Performance and Results 

Act of 1993, and the Clinger-Cohen Act of 1996; and our broad body of work 

and resultant knowledge of human capital management issues. 

CHCOs Vary in Their 

Prior Role, Designated 

Duties, Employment 

Status, and Reporting 

Relationships

The 24 agency CHCOs appointed since May 2003 varied in the position they 

were holding prior to their selection by the agency head, the 

responsibilities assigned to them when they became CHCOs, whether they 

were political appointees or career executives, and whether they reported 

directly to the agency head:

• The inaugural CHCOs at most federal agencies were executives who 

were already in positions leading their agency’s human capital 

management. Of the 21 agency CHCOs selected from within the agency, 

14 have been the human capital director for their agency and 7 have 

been the executive to whom the agency’s human capital director 

reported. OPM selected its CHCO from within the agency, but the 

individual has been a senior policy advisor, not an internal OPM human 

capital manager. Two of the 24 agencies—the Departments of 

Homeland Security and Treasury—selected CHCOs from outside their 

agencies.

• The 24 CHCOs positions were evenly split between those whose 

designated duties focus solely on human capital management and those 

who have significant additional responsibilities. For example, the 

Departments of Commerce, Interior, and Veterans Affairs have vested 

CHCO and CFO responsibilities in one person. The CHCOs at the 

Departments of Education, Housing and Urban Development, and Labor 

are also the Chief Information Officer (CIO) for those agencies. The 

additional responsibilities of various other CHCOs include 

administrative services, facilities management, and procurement.

• The CHCOs were evenly split between career executives and political 

appointees. Of the 24 CHCOs, 12 were career senior executives and 12 

were political appointees. Since the inaugural CHCO appointments, 

two agencies--the Departments of Agriculture and Health and Human 

Services--have changed their CHCO designation from the incumbent 

career executive to a higher-level political appointee. Most of the career 
Page 3 GAO-04-800T 

executives (8 of the 12) focus solely on human capital management, 

while the political appointees generally had additional responsibilities. 

• More than half (15 of 24) of the inaugural CHCOs reported directly to 

the agency head. While some CHCOs who report directly to the agency 

head told us this gives them an important “seat at the table” where key 

decisions are made, some CHCOs who do not report to their agency 

head said having all or most of the agency chief management positions 

do so may impede efficient management coordination within the agency. 

Most of the political appointees (9 of 12) report directly to the agency 

head, while half of the career executives (6 of 12) report to another 

agency official.

Agencies’ appointments of CHCOs represent an important achievement 

considering the challenges agencies faced in filling the CFO and the CIO 

positions. For example, 5 years after the enactment of the law creating the 

agency CFO position, we found that some agencies had yet to fill the 

position or the Deputy CFO position.1

The diversity of approaches that agencies are taking suggests that it is 

unlikely that there will be a single model for the CHCO position that will fit 

all agencies. Several CHCOs told us that agency size, available leadership 

talent and the agency’s existing executive leadership structure were all 

considered in designating the CHCO position and determining the 

qualifications of those who should fill it. However, ensuring that the CHCO 

can provide the leadership necessary to do the job well in those situations 

where they also have additional direct management responsibilities should 

be closely monitored in the coming years. We have also raised similar 

concerns regarding the CFOs and CIOs who have direct leadership

1

U.S. General Accounting Office, Financial Management: Momentum Must Be Sustained 

To Achieve the Reform Goals of the Chief Officers Act, GAO/T-AIMD-95-204 (Washington, 

D.C.: July 25, 1995).
Page 4 GAO-04-800T 

responsibilities for a variety of management areas. 2 While some CHCOs 

with key responsibilities in multiple areas have said they believe this 

enables them to achieve quicker decision-making on strategic human 

capital issues, other CHCOs said they prefer devoting all their attention to 

human capital issues. 

More generally, we have suggested that Congress consider establishing 

Chief Operating Officer (COO) or equivalent positions in selected agencies 

as one element of an overall strategy to address certain systemic federal 

governance and management challenges. These COOs would be part of a 

broader effort to elevate attention to management and transformation 

issues, integrate various key management and transformation efforts, and 

institutionalize accountability for addressing management issues leading a 

transformation.3

 By their very nature, the problems and challenges facing 

agencies are crosscutting and thus require coordinated and integrated 

solutions. However, the risk is that management responsibilities 

(including, but not limited to information technology, financial 

management, and human capital) will be “stovepiped” and thus will not be 

implemented in a comprehensive, ongoing, and integrated manner. While 

officials with management responsibilities often have successfully worked 

together, there needs to be a single point within agencies with the 

perspective and responsibilities—as well as the authority—to ensure 

successful implementation of functional management initiatives and, if 

appropriate, transformation efforts.

2

U.S. General Accounting Office, Financial Management: CFO Act Is Achieving 

Meaningful Progress, GAO/T-AIMD-94-149 (Washington, D.C.: June 21, 1994), and Chief 

Information Officers: Ensuring Strong Leadership and an Effective Council, GAO/TAIMD-98-22 (Washington, D.C.: Oct. 27, 1997).

3

For additional information on the COO concept and how it might apply to federal agencies, 

see U.S. General Accounting Office, Highlights of a GAO Roundtable: The Chief Operating 

Officer Concept: A Potential Strategy to Address Federal Governance Challenges, GAO-03-

192SP (Washington D.C.: October 2002). 
Page 5 GAO-04-800T 

CHCOs Are Giving 

Priority Attention to 

the Strategic Human 

Capital Initiative of the 

President’s 

Management Agenda 

According to the CHCOs, their efforts are primarily focused on the human 

capital efforts needed to address the President’s Management Agenda 

(PMA). The President’s Management Agenda identified five crosscutting 

management initiatives: the strategic management of human capital, 

competitive sourcing, improved financial performance, expanded 

electronic government, and budget and performance integration. We 

collaborated with OMB and OPM regarding the broad standards of success 

for the strategic human capital management PMA initiative. The resulting 

standards are consistent with the need for agencies to address the 

challenges they face in four key areas outlined in our report on strategic 

human capital management as a government-wide high risk area:

• leadership, continuity and succession planning;

• strategic human capital planning and organizational alignment;

• acquiring and developing staffs whose size, skills and deployment meet 

agency needs; and 

• creating results-oriented organizational cultures.4

We have noted that the PMA initiatives are intended to be mutually 

reinforcing and must be addressed in an integrated way to ensure that there 

is the needed management capacity to drive a broader transformation of 

the cultures of federal agencies.5

 In our discussions with the CHCOs, they 

have cited strategic human capital management and, to a lesser extent, 

competitive sourcing as the two primary PMA initiatives where they are 

focusing their efforts. 

As such, work on the PMA provides an early opportunity for the CHCOs to 

play an active integrating role with other key agency leaders. For example, 

the Environmental Protection Agency’s (EPA) CHCO told us EPA is in the 

midst of phased implementation of a workforce planning methodology that 

EPA believes will enable EPA’s line managers to make decisions on 

4

U.S. General Accounting Office, High-Risk Series: An Update, GAO-01-263 (Washington, 

D.C.: January 2001).

5

U.S. General Accounting Office, Management Reform: Continuing Progress in 

Implementing Initiatives in the President’s Management Agenda, GAO-03-556T 

(Washington, D.C.: Mar. 26, 2003). 
Page 6 GAO-04-800T 

deploying employees with mission-critical skills and competencies both 

programmatically and geographically to fulfill EPA’s mission. Similarly, the 

National Aeronautics and Space Administration’s (NASA) CHCO told us 

NASA is refining an agencywide competency management system that will 

be used to identify, manage, and report workforce competencies, which 

NASA believes will be capable of capturing competencies for every 

employee, every position, and every budgeted program or project.

In the area of performance management, according to the Department of 

Justice’s CHCO, the agency contracted with consultants to identify 

problems, issues, and barriers and suggest ways to transform the existing 

“paperwork exercise” performance management program into a resultsoriented performance culture. In the area of aligning the human capital 

office for improved strategic contribution, the Department of Energy’s 

(DOE) CHCO told us that the agency’s Office of Human Resources 

Management completed a study of the organization resulting in a 

recommendation to transform it into “One HR,”—a more unified approach 

to developing and aligning HR activities, programs, services and staff with 

the strategic direction of DOE.

While we have not assessed these specific actions, they illustrate the kinds 

of agency human capital initiatives that position the agencies to move 

forward in the coming years. However, as our experience with major 

management reform efforts has demonstrated, achieving the goals of major 

reform requires a long-term sustained effort. We have noted that major 

reforms can take at least 5 to 7 years until such initiatives are fully 

implemented and the related cultures are transformed in a sustainable 

manner.6

CHCO Council Taking 

Initial Steps to Improve 

Human Capital 

Management

The CHCO Act calls for the establishment of a CHCO Council consisting of 

the Director of OPM as Chair, the Deputy Director for Management of OMB 

as Vice Chair, and the CHCOs of executive departments and any other 

members who are designated by the Director of OPM. An effective and 

strategic CHCO Council is vital to meeting the goals of the CHCO Act as 

well as addressing the federal government’s crosscutting strategic human 

6

U.S. General Accounting Office, Highlights of a GAO Forum: Mergers and 

Transformation: Lessons Learned for a Department of Homeland Security and Other 

Federal Agencies, GAO-03-293SP (Washington, D.C.: Nov. 14, 2002). For a specific 

discussion of this point in relation to financial management, see GAO/T-AIMD-95-204.
Page 7 GAO-04-800T 

capital challenges. We have reported that interagency councils, such as the 

CFO and CIO councils, have emerged as important leadership strategies in 

both developing policies that are sensitive to implementation concerns and 

gaining consensus and consistent follow-through within the executive 

branch.7

 For example, the CFO Council has played a lead role in creating 

goals for improving federal financial management practices, providing 

sound advice to OMB on revisions to executive branch guidance and policy, 

and building a professional community of governmentwide financial 

management expertise.

The CHCO Council can play another similarly useful role. As stated in its 

charter, the Council’s purposes include (1) advising OPM, OMB, and agency 

leaders on human capital strategies and policies, as well as on the 

assessment of human capital management in federal agencies, (2) 

informing and coordinating the activities of its member agencies on such 

matters as modernization of human resources systems, and (3) providing 

leadership in identifying and addressing the needs of the government’s 

human capital community. 

The Council’s activities during its first year have largely revolved around 

three major areas: organizing the council, creating a CHCO Academy, and 

establishing subcommittees.

Council organization The Council meets periodically, currently averaging a meeting every other 

month, with the meetings attended by the CHCOs as well as by the 

Council’s Chair, Vice Chair, Executive Director, and representatives of 

other organizations that may be invited or approved by the Chair. The 

Council has formed an executive committee consisting of the Chair, Vice 

Chair, and seven Council members. When votes are taken, each Council 

member has one vote, and members must be present to vote.

The Council does not yet have a strategic plan to help guide its work and 

serve as a benchmark for measuring progress, although according to the 

Council’s Executive Director, the Chair is reviewing the Council’s draft 

strategic plan for FY 2004, which then has to be approved by the executive 

committee and by the full Council. The Executive Director told us the 

strategic plan would have some details on the priority items and target 

7

U.S. General Accounting Office, Government Management: Observations on OMB’s 

Management Leadership Efforts, GAO/T-GGD/AIMD-99-65 (Washington, D.C.: Feb. 4, 1999).
Page 8 GAO-04-800T 

dates on which the Council is working this year. As we saw in the case of 

the CFO Council, achieving accomplishments that have strategic impact 

requires well-defined goals and measures.8

 The timely completion of the 

CHCO Council’s plan is therefore important to help provide a sense of 

direction for the Council as well as to communicate to Congress and other 

stakeholders the role the Council will play and how it will meet its 

responsibilities. The shared understandings that can be developed as part 

of the planning process are particularly important to councils since they 

play vital leadership and coordination roles. As just one illustration of the 

importance of their leadership and coordination role, OPM agreed with our 

May 2003 recommendation to work with and through the Council to more 

thoroughly research, compile, and analyze information on the effective and 

innovative use of human capital flexibilities and more fully serve as a 

clearinghouse in sharing and distributing information about when, where, 

and how the broad range of flexibilities are being used, and should be used, 

to help agencies meet their human capital management needs.9

CHCO Academy OPM has created the Chief Human Capital Officers Academy as part of the 

CHCO Council. OPM created the academy as an outreach vehicle to 

educate CHCOs about current human capital management issues and 

available human resources flexibilities, with an emphasis on how they fit 

within an overall merit-based civil-service system. The academy has 

scheduled one-day monthly training and discussion sessions with CHCOs 

throughout 2004. Past sessions have focused on topics such as Title 5 and 

outsourcing human resources services.

Subcommittees The Council created subcommittees to address and recommend changes 

for five key areas identified by the Council’s leadership as critical to the 

success of the strategic management of the human capital initiative 

outlined in the PMA: the hiring process, performance management, 

leadership development and succession planning, employee conduct and 

poor performers, and emergency preparedness. The five subcommittees 

are examining their issues and developing recommendations for review by 

the executive committee and, subsequently, the Council. We understand 

8

GAO/T-AIMD-98-22.

9

U.S. General Accounting Office, Human Capital: OPM Can Better Assist Agencies in 

Using Personnel Flexibilities, GAO-03-428 (Washington, D.C.: May 9, 2003).
Page 9 GAO-04-800T 

that three of the five subcommittees—hiring process, leadership 

development and succession planning, and employee conduct and poor 

performers—have submitted their first reports for review by the executive 

committee. However, these reports have not been released.

The executive committee is expected to review these reports at its May 

meeting and, depending on that review, the full Council could review these 

reports at its scheduled July meeting. 

At the request of this subcommittee and others in Congress, we have 

undertaken a large body of work in recent years that should prove helpful 

to the Council and its subcommittee as they develop their initiatives. For 

example: 

Hiring Process As we reported in May 2003, there is widespread recognition that the 

current federal hiring process does not meet the needs of agencies in 

achieving their missions, of managers in filling positions with the right 

talent, and of applicants for a timely, efficient, transparent, and merit-based 

process.10 We made a number of recommendations to OPM to address 

various parts of the hiring process including:

• studying how to simplify, streamline, and reform the classification 

process;

• assisting agencies in automating their hiring processes;

• continuing to assist agencies in making job announcements and Web 

postings more user-friendly and effective;

• helping agencies develop improved hiring assessment tools; and

• reviewing the effectiveness of the Outstanding Scholar and 

Bilingual/Bicultural Luevano Consent Decree hiring authorities.

At the request of this subcommittee we are assessing actions taken to 

improve the hiring process and plan to issue a report early next month. 

Agencies and OPM need to work together to improve the hiring process, 

10U.S. General Accounting Office, Human Capital: Opportunities to Improve Executive 

Agencies’ Hiring Processes, GAO-03-450 (Washington, D.C.: May 30, 2003).
Page 10 GAO-04-800T 

and the CHCO Council should be a key vehicle for this needed 

collaboration.

Performance Management There is little question that modernizing agency performance management 

systems and creating a clear linkage between individual performance and 

organizational success is a governmentwide strategic human capital 

challenge. Even though an explicit alignment of individuals’ daily activities 

with broader results is one of the defining features of effective 

performance management, it is still a work in progress at the federal level. 

For example, in three governmentwide surveys we conducted in 1997, 

2000, and 2003, an increasing but still less than 50 percent of federal 

managers reported that employees in their agencies received positive 

recognition to a great or very great extent for helping agencies accomplish 

their strategic goals.11 

High performing organizations have found that an effective performance 

management system can be a strategic tool to drive internal change and 

achieve desired results. These systems are not merely used for a once or 

twice-yearly individual expectation setting and rating process but are tools 

to help the organization manage on a day-to-day basis and to facilitate twoway communication throughout the year so that discussions about 

individual and organizational performance are integrated and ongoing.

In that regard, we have reported extensively on public sector organizations 

in the United States and abroad that have implemented a selected, and 

generally consistent set of key practices as part of their performance 

management systems that in turn help create the line of sight between 

individual performance and organizational success.12 These practices 

should be helpful to the CHCO Council’s performance management 

subcommittee as it develops recommendations and strategies to assist 

agencies implementing effective performance management systems. 

11U.S. General Accounting Office, Results-Oriented Government: GPRA Has Established a 

Solid Foundation for Achieving Greater Results, GAO-04-38 (Washington, D.C.: Mar. 10, 

2004).

12U.S. General Accounting Office, Results-Oriented Cultures: Creating a Clear Linkage 

between Individual Performance and Organizational Success, GAO-03-488 (Washington, 

D.C.: Mar. 14, 2003).
Page 11 GAO-04-800T 

Leadership Development and 

Succession Planning

In March 2004, GAO issued a guide for assessing strategic training and 

development efforts in the federal government.13 This guide introduced a 

framework, consisting of a set of principles and key questions that agencies 

can use to ensure that training and development investments are targeted 

strategically and not wasted on efforts that are irrelevant, duplicative, or 

ineffective. Using the principles in this framework, we reported on some 

agencies' experiences and lessons learned related to a) assessing agency 

skill requirements and identifying training needs, b) developing strategies 

and solutions, and c) determining evaluation methods.14 Some of the 

experiences and lessons learned that the agencies identified were from 

their leadership development programs. For example, the Internal 

Revenue Service (IRS) interviewed top agency leaders and benchmarked 

with leading practices in the public and private sector to develop its 

leadership competency model. This model forms the basis for IRS' 

leadership development efforts, as well as how IRS selects, evaluates, and 

recognizes its leaders. IRS also analyzed data from 360-degree feedback 

instruments and used this information in customizing its programs to build 

employees' strengths in areas that IRS has identified as key to providing 

effective leadership within its organizational culture and operating 

environment.

More generally, we have also reported that leading organizations engage in 

broad, integrated succession planning and management efforts that focus 

on strengthening both current and future organizational capacity. As part 

of this approach, these organizations identify, develop, and select their 

people to ensure that successors are the right people, with the right skills, 

at the right time for leadership and other positions. Based on our review of 

leading practices in selected public sector organizations in Australia, 

Canada, New Zealand, and the United Kingdom, we identified a set of 

succession planning and management practices that should prove helpful 

to the Council and individual agencies in their efforts to protect and

13U.S. General Accounting Office, Human Capital: A Guide for Assessing Strategic 

Training and Development Efforts in the Federal Government, GAO-04-546G (Washington, 

D.C.: March 2004).

14U.S. General Accounting Office, Human Capital: Selected Agencies’ Experiences and 

Lessons Learned in Designing Training and Development Programs, GAO-04-291 

(Washington, D.C.: Jan. 30, 2004). 
Page 12 GAO-04-800T 

enhance organizational capacity.15 Among these practices we found that 

these organizations address specific human capital challenges, such as 

diversity, leadership capacity, and retention.

Employee Conduct and Poor 

Performers 

OPM and the Merit Systems Protection Broad have both done employee 

surveys and related important work on conduct and poor performers 

issues. Our work has focused on the broader issue of mechanisms and 

strategies that agencies can use to reduce workplace conflict, including 

those associated with conduct and performance issues. For example, our 

work has shown that alternative dispute resolution (ADR) processes are a 

way of dealing with workplace conflict.16 ADR is a resource to employees 

and supervisors alike and, in our view, can help prevent conflicts 

manifested as poor conduct or performance from arising in the first place 

or can facilitate resolution of problems. In short, we believe that a key part 

of the CHOC subcommittee’s agenda should be to explore, validate, and 

disseminate mechanisms and strategies that can be used to address 

problems efficiently, effectively, and fairly, as well as keep them from 

occurring in the first place.

Emergency Preparedness As we recently reported, federal continuity planning guidance has 

appropriately been given priority to the human capital considerations 

associated with the immediate aftermath of a crisis that is securing the 

safety of all employees and addressing the needs of employees who 

perform essential operations.17 However, we found that additional human 

capital considerations, especially those associated with the majority of an 

organization’s employees who do not perform essential operations yet 

would be needed to resume all other agency operations, are also crucial 

and have not been well developed in federal guidance. To more fully 

address these considerations, we identified two human capital principles 

that should guide all continuity efforts—demonstrating sensitivity to 

individual employee needs and maximizing the contribution of all 

15U.S. General Accounting Office, Human Capital: Insights for U.S. Agencies from Other 

Countries’ Succession Planning and Management Initiatives, GAO-03-914 (Washington, 

D.C.: Sept. 15, 2003).

16U.S. General Accounting Office, Human Capital: The Role of Ombudsmen in Dispute 

Resolution, GAO-01-466 (Washington, D.C.: Apr. 13, 2001) and Alternative Dispute 

Resolution: Employers’ Experiences With ADR in the Workplace, GAO/GGD-97-157 

(Washington, D.C.: Aug. 12, 1997).

17U.S. General Accounting Office, Human Capital: Opportunities to Improve Federal 

Continuity Planning Guidance, GAO-04-384 (Washington, D.C.: Apr. 20, 2004).
Page 13 GAO-04-800T 

employees—and six key organizational actions designed to enhance these 

efforts:

• Demonstrate top leadership commitment.

• Seek opportunities for synergy.

• Maintain effective communication.

• Target investments in training and development.

• Leverage the flexibility of human capital.

• Build a process to identify and share lessons.

We made recommendations to the Federal Emergency Management 

Administration (FEMA) and OPM to more fully address human capital 

considerations in emergency preparedness guidance by incorporating the 

key actions listed above. We also recommended to OPM that they clearly 

define the role Federal Executive Boards play in improving emergency 

preparedness coordination in areas outside of Washington, D.C. Both 

FEMA and OPM need to work together to improve the federal continuity 

planning guidance, and the CHCO Council can be a key vehicle for this 

needed collaboration.

Council’s Important 

Role in Other Areas

In addition to these important areas, our work suggests that the Council 

should ensure that its efforts address agencies’ need for guidance, 

assistance, knowledge, and leading practices in several other key 

crosscutting areas:

Developing the Capabilities Required for Successful Implementation of 

Human Capital Reform: As highlighted previously, the Council can play a 

central role in helping agencies build the internal capabilities needed to 

effectively use the authorities that Congress has provided. In that regard, 

our work has identified a set of capabilities that are central to the effective 

use of human capital authorities:18

18U.S. General Accounting Office, Human Capital: Effective Use of Flexibilities Can Assist 

Agencies in Managing Their Workforces, GAO-03-2 (Washington, D.C.: Dec. 6, 2002). 
Page 14 GAO-04-800T 

• Plan strategically and make targeted investments.

• Ensure stakeholder input in developing policies and procedures.

• Educate managers and employees on the availability and use of 

flexibilities.

• Streamline and improve administrative processes.

• Build transparency and accountability into the system.

• Change the organizational culture.

Strategic Human Capital Planning: Strategic human capital planning is 

an essential element of the institutional infrastructure to ensure that an 

agency’s human capital program optimizes its workforce’s strengths and 

addresses related challenges in a manner that is clearly linked to achieving 

the agency’s mission. While each agency needs to tailor the strategic 

workforce planning process to the agency’s particular needs and mission, 

our work has found that there are certain principles that should be 

addressed irrespective of the particular planning approach or model that is 

used.19 

These include:

• Involve top management, employees and other stakeholders in 

developing, communicating and implementing the strategic workforce 

plan.

• Determine the critical skills and competencies that will be needed to 

achieve current and future programmatic results.

• Develop strategies that are tailored to address gaps in number, 

deployment, and alignment of human capital approaches for enabling 

and sustaining the contributions of all critical skills and competencies.

• Build the capability needed to address administrative, educational, and 

other requirements important to support workforce strategies. 

19U.S. General Accounting Office, Human Capital: Key Principles for Effective Strategic 

Workforce Planning, GAO-04-39 (Washington, D.C.: Dec. 11, 2003).
Page 15 GAO-04-800T 

• Monitor and evaluate the agency’s progress toward its human capital 

goals and the contribution that human capital results have made toward 

achieving programmatic goals.

The provisions of the CHCO Act recognize the critical importance of 

strategic human capital planning and require each CHCO to prepare the 

portion of the agency annual performance plan and describe how the 

performance goals and objectives are to be achieved, including the 

operation processes, training, skills and technology, and the human, 

capital, information, and other resources and strategies required to meet 

those performance goals and objectives. In addition, the agency 

performance reports are to include a review of the performance goals and 

evaluation of the performance plan relative to the agency’s strategic human 

capital management. These provisions will give additional impetus to 

improve agencies’ strategic human capital planning.

Transforming the Human Capital Office and Its Processes to More Fully 

Contribute to Key Agency Decisions: The need to more closely integrate 

the agency human capital approaches with agencies’ strategies for 

accomplishing organizational missions places responsibility on the CHCO 

to develop the human capital office to fulfill enlarged roles, such as, partner 

with line managers, human capital expert, leader and change agent to meet 

current and future programmatic needs. To shift the resources of the 

human capital office from being providers of largely transaction-based 

services to better align with its role of integrating human capital 

approaches in agency plans and strategies, the CHCO will often be 

compelled to restructure its human capital office.

The pressures on human capital professionals to assume new roles present 

a significant learning and development challenge for human capital staff 

members. For human capital professionals to begin acting in their new 

capacities CHCOs must ensure that they develop the competencies through 

a systematic investment in training and development20 and gain the 

experience to effectively take on the expected roles. The CHCOs’ personal 

leadership in providing the vision and the systematic approach to engaging 

the human capital staff in a positive transition from narrowly-focused 

specialists to larger roles, such as partners, human capital experts, leaders, 

and change agents, and assure the staff have all the skills necessary to play 

an active role in helping to determine the overall strategic direction of the 

20GAO-04-546G.
Page 16 GAO-04-800T 

organization will be a significant long-term challenge. The CFO and CIO 

experiences at a similar point in their histories recognized the need to build 

their staff’s skills and capabilities. 

In conclusion, the need to transform the way government does its business 

and the long-term fiscal challenges facing the government will only 

increase the importance of integrating human capital approaches that are 

linked to the agency’s plans and strategies. While the initial steps taken 

over this first year have shown progress, the coming year is critical to 

leveraging that progress to achieve significant accomplishments and 

facilitate lasting change. This progress will come from aligning the agency 

human capital approach with program goals and integrating the human 

capital initiatives and organization as part of a comprehensive systematic 

approach to transforming the agency and dramatically improving its 

performance.

Madam Chairwoman and Mr. Davis, this completes my statement. I would 

be pleased to respond to any questions that you may have.

Contacts and 

Acknowledgments

For further information regarding this testimony, please contact J. 

Christopher Mihm, Director, Director, Strategic Issues, on (202) 512-6806 or 

at mihmj@gao.gov. Individuals making key contributions to this testimony 

included William Doherty, Clifton G. Douglas, Tony Lofaro, Jeffery 

McDermott, Susan Ragland, Lisa Shames, and Edward H. Stephenson, Jr.

(450328)
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